Of course these people are stupid giving a 100% chance bitcoin goes to a trillion dollars. Just like I said the other day, people like Peter Thiel probably own tens of thousands of these dumb things and yet he still says 50-80% chance of bitcoin dying. You're not going to be a very good investor if you make up illogical propaganda and try to get yourself to believe it.
I think we're on the verge of a new phase for bitcoin and crypto in general that none of us have seen before or are aware of what is around the corner.
There are 2 significant aspects of that "phase" that will drive everything forward - one is good (progress towards mass and institutional adoption, at least as a store of value if not a means of exchange), the other is (potentially) a huge lurking iceberg - and that is the spectre of widespread and deep regulation.
I didn't realise how profound this was until I started thinking about crypto from an "accounting" point of view. Then a whole lot of peices of the jigsaw suddenly made sense all at once:
• the ongoing consolidation of defining crypto as
property by regulatory authorities
• the emergence of the new
Google for cryptocurrency networks, known as "Cointracker" and the algos it uses calculate tax. (It was in fact built by ex-Google engineers)
• the market movements of the last year - in particular the huge
alt ratios that encouraged intense coin-to-coin trading at the precise moment when the bitcoin/fiat valuations were at an all time high
What is the significance of defining crypto as "property" (say, as opposed to "currency"). Basically is means that any exit from an address is considered a
disposal rather than an
expenditure. This is profoundbecause in the event of a cryptocurrency audit (either on an individual or organisation), "partial" information always favours the regulatory authority. For example, lets say:
• you have a partial trading history which you provide during an audit.....
When that's analysed, a bottom line for your portfolio holdings will emerge (which will be wrong). If that "calculated" portfolio says we have more bitcoin than you actually have, then we'll simply be taxed on the "disposal". i.e. they've got you either way - either you can account for the location of funds or you simply end up with a huge tax bill.
• off-exchange trading/expenditure
Same thing here. It ends up in the interest of holders to disclose all incidental exchanges of crypto for other crypto or for anything in fact, because any address that's identified as being owned by a certain party at any point in time, if later found to be "emptied" is a juicy candidate for taxation.
Nor are "obfuscated chains" any use. They will simply be regarded as "disposals". (i.e. any purchase of a "privacy coin" will be seen as a disposal and taxed accordingly).
This is already happening. The
UK for example just issued unambiguous guidelines 1 month prior to this years filing deadline, so everybody that's short has to liquidate at the bottom of the market to pay tax on Jan 2018 prices. Pretty deadly !
However, once we've "taken the pain" and passed through this phase, the shoe will be on the other foot. The institutions will have the green light to pump everything to Kingdom Come and the moon will come into view. However by that time it will be better to have "regulatory clean" crypto than "regulatory dirty". I already had to liquidate 30% of my holdings cos of being caught in this trap. I see it as the cost of getting my holdings through this phase - out of the "dark" and into the "light". I'm hoping it's worth it !
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